Two Taxation Agendas: The Gallop Government's First Term

This essay reviews state taxation policy in Western Australia over the Gallop Government's first term of office. Two tax agendas emerged, one concerning reform of the State's tax system and the other concerning measures to increase the tax yield in response to mid-term fiscal stress from unanticipated growth in expenditure. It is suggested that the lack of integration of these two agendas represented a lost policy opportunity, as integration would have provided the potential to implement a much more ambitious tax reform program than that realised by the Government. The lack of integration is partly attributed to the unrealistically low forward estimates of public expenditure outlined in the Government's first budget, as this served to mask the need for additional taxation revenue (and the consequent desirability of an integrated whole-of-term taxation policy) at the very time that reform measures were being actively contemplated. As a consequence, the dominant feature of the Government's first-term tax policy was not reform, but the introduction of large mid-term revenue-raising measures, especially increases in the State's highly inefficient conveyance duty.